US Federal Reserve minutes released Wednesday show most policy-makers foresee another interest rate hike by year's end, as the central bank targets stubbornly high inflation.
At a meeting in September, the bank's Federal Open Market Committee voted unanimously to raise interest rates by 25 basis points to a range between 3.75 and 4.00 percent.
US households and businesses have been battered by years of high prices since the pandemic, with the Fed unable to achieve its long-term two-percent inflation target for more than half a decade.
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"With regard to the outlook for monetary policy beyond the current meeting, most participants assessed that another increase in the target range for the federal funds rate would likely be appropriate by year end," said minutes of the meeting, released after a routine three-week lag.
Several participants said they viewed the previous policy rate as not being adequately restrictive of economic activity.
The Fed has a dual mandate of keeping inflation to its target while ensuring maximum employment.
The unemployment rate in the United States has been relatively steady over the last year, even as job growth has see-sawed. That stability is due to demographic changes and lower immigration.
"Almost all participants assessed that, while inflation risks were tilted to the upside, risks to the labor market had diminished and were now broadly balanced," the Fed's meeting minutes said.
{{/usCountry}}"Almost all participants assessed that, while inflation risks were tilted to the upside, risks to the labor market had diminished and were now broadly balanced," the Fed's meeting minutes said.
{{/usCountry}}Personal Consumption Expenditures price index inflation the Fed's preferred gauge for price increases hit a peak of 7.2 percent in June 2022 before beginning to fall.
It hit a low of 2.2 percent in September 2024 before beginning to increase again, partially driven by US President Donald Trump's unpredictable economic policies, including the widespread imposition of tariffs on US imports.
Trump's war on Iran has pushed prices up even further since February, with energy costs skyrocketing due to Tehran's retaliatory action.
PCE inflation hit a three-year peak of 3.8 percent in May, and tempered slightly to 3.4 percent by August, the latest month for which data is available.
Participants of the meeting noted that there had been insufficient progress in lowering inflation in recent months.
"They noted that ongoing geopolitical developments, which had pushed up prices for crude oil and refined fuel products, and surging AI-related investments were contributing to inflation pressures," the minutes said.
Participants expressed concern that the longer energy prices remained at elevated levels as they currently are "the greater the risk that cost increases in certain sectors could lead to broader price pressures."
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